Credit Union Times Magazine March-09, 2005

News

WASHINGTON - From seminars to online tools such as health plan comparison charts and health care spending account calculators, when it comes to health savings accounts consumer education is the key to acceptance. A Watson Wyatt WorkUSA Pulse Survey finds that only 29% of adults with health insurance have even...

Let's face it; the way we all do business has changed. We are living in an exciting age where technology is a huge part of our everyday life. With 137 million Americans now owning computers, and 60 million of them using broadband Internet access, expectations regarding technology are rising, and...

MADISON, Wis. - With the public's increased interest in Health Savings Accounts (HSAs), CUNA Mutual Group has launched an administrative support program to help credit unions offer HSAs to their members. Set to kickoff on April 1, CUNA Mutual's HSA administrative support program will offer credit unions access to services...

ALBANY, N.Y. - The New York Credit Union Foundation (NYCUF) has collected a total of $63,906 in Tsunami Disaster Relief Fund donations. NYCUF has transferred the funds, donated by 53 New York credit unions, 58 individuals, and the Metropolitan District of the NYSCUL, to the World Council of Credit Union's...

WASHINGTON-Banks and thrifts beat their previous record net income of $120.5 billion for 2003 with a total of $123 billion at year-end 2004, according to year-end data from the Federal Deposit Insurance Corporation. Last year was the fourth consecutive year that industry earnings set a new record. The industry earned...

FEDERAL WAY, Wash. - The Washington CUL and Jump$tart have teamed up to launch the 1st Annual Jump$tart Art Contest. Led by Washington Credit Union League Senior Vice President Stacy Augustine, the public awareness campaign is designed to not only give Washington's students $1,200 in savings bonds but also increase...

WASHINGTON-Much of CUNA's financial data from 2004 was even better than the trade association itself expected. CUNA's net assets came out at $1.47 million for 2004, up $1.2 million from the previous year and nearly a million ($970,000) more than was budgeted. Revenue generated by fees was up 8.8% over...

CHICAGO - Alliant Credit Union is reaching out to hard-pressed United Airlines employees this month with a loan plan that cuts payments by 30% for qualified members impacted by job loss or pay cuts. Under its new "Member Assistance Program" introduced in mid-February, the CU is extending terms on new/used...

GLENDORA, Calif. - While automation brought greater efficiencies for credit unions looking to launch business lending divisions, something may have been lost along the way. "Before the infusion of major technology advances, starting a commercial loan department was quite a bit easier than it is now," said Loren Wilson, vice...

WASHINGTON-The Senate spent the better part of last week debating the Bankruptcy Abuse Prevention and Consumer Protection Act (S. 265), but a new wrinkle has appeared for proponents. At a press conference he called last week, Senator Edward Kennedy (D-Mass.) said he plans to introduce numerous amendments in an attempt...

WASHINGTON - Lower yields on loan and investment portfolios, higher operating expenses and sluggish member growth all contributed to 2004's 0.92% return on assets, which is down from 1.01% in 2003 according to year-end analysis from Callahan & Associates. While ROA has been on a downward spiral for the past...

SPOKANE, Wash. - Telco Credit Union is the latest member of an ever growing group of credit unions that have opted to change their names. Effective March 1, 2005, Telco CU has transformed into PrimeSource CU. According to execs here, since the field of membership has greatly expanded to include...

WASHINGTON - Give members something interesting to look at and they might not realize they're even waiting in line. According to multi-media communications firm inLighten, Depew, New York, 35% of the credit unions that offer inLighten's multi-media content in their branches say their members feel it makes their wait time...

SAN BERNARDINO, Calif. - Arrowhead Credit Union has treated the families of more than 200 members of the 185th Armor Regiment of the California Army National Guard to lunch as they waited to welcome their loved ones home at Arrowhead Credit Union Park. The troops had spent five days at...

VALLEJO, Calif. - Vallejo Schools Federal Credit Union and 1st Pacific Credit Union have merged effective March 1, 2005. The new "Vallejo Schools" branch of 1st Pacific Credit Union will open at 145 Valle Vista Avenue and will be the primary branch for Vallejo Schools' employees. Given how recent financial...

SAN FRANCISCO - Wells Fargo has announced that its entire ATM fleet has been outfitted with Web-enabled ATMs. "Very few of our customers are single-channel users," said Jonathan Velline, head of Wells Fargo's ATM Banking. "Today more than 51% of our checking accounts are accessed online and our customers are...

WASHINGTON-Congressman Spencer Bachus (R-Ala.), together with Vermont Independent Rep. Bernie Sanders, introduced legislation March 2 to amend the definition of credit unions' net worth in response to changes proposed by the Financial Accounting Standards Board. Without amendment, credit unions would be stuck with a definition of `retained earnings' for net...

MANCHESTER, N.H. - St. Mary's Bank, the oldest credit union in the U.S., recently opened its new Mortgage Center as part of its ongoing effort to deliver "world class service to consumers," a CU spokesperson said. The new center, says the credit union, allows consumers to apply for a mortgage...

DENVER - 2005 is only three months old but indicators suggest this may just be Centrix Financial LLC's year. At a time when NCUA has cautioned credit unions of the risks involved with indirect lending as more CUs offer the lending service and some credit unions question just how sound...

ARLINGTON, Va. - NASCUS' radar screen remains full with new issues such as NCUA' recently proposed Prompt Corrective Action reform proposal, as well as others the association has been following for awhile. NASCUS Credit Union Council Chairman Mike Litzau, president/CEO, Colorado Central CU in Arvada, said Unrelated Business Income Tax...

ST. PETERSBURG, Fla. - The credit union movement's first and only nationally chartered trust company emphasized investments, regulatory and operational, issues and sharing best practices at its first user's meeting of credit union trust officers. More than 30 representatives of credit unions nationwide participated in the meeting, organized by MEMBERS...

ALEXANDRIA, Va.-NCUA Board Member Debbie Matz raised two problems she had with the capital proposal that recently came out of Chairman JoAnn Johnson's office, to which she said agency staff was receptive. "The staff has done a really terrific job on a very complicated issue," she said. The proposal will...

COLUMBUS, Ohio - For the first time in 18 years, credit unions in Ohio are looking at the possibility their state Credit Union Act will be modernized. House Bill 81 was introduced Feb. 23 in the Ohio House of Representatives by state Rep. Geoffrey Smith (R-24). His measure has 18...

DALLAS - While the industry is still waiting to see what action, if any, the Texas CU League will take on Community CU's proposed conversion to a bank, how the state's shared branching network will handle Community CU's membership in the shared network has already been decided. Community Credit Union...

WALNUT CREEK, Calif. - Maybe it's his training as an industrial engineer, but steady, incremental improvement is just fine with Tom Smigielski. Smigielski - president/CEO of Pacific Service Credit Union - never pursued engineering after graduating from Purdue University. But evidently at least a little bit of an engineer's desire...

HARRISBURG, Pa. - Pennsylvania Department of Banking Secretary A. William Schenck III is getting tough on enforcing consumer protection legislation. Schenck, who was appointed Secretary two years ago by Gov. Ed Rendell, has set up a new Investigations Division to expand the historic role of the agency from one of...

THE WOODLANDS, Texas - Supplemental executive retirement plans (SERPS) are becoming more the norm at larger credit unions, according to a just-released industry survey. In D. Hilton Associates Inc.'s SERP survey, the CEOs of 353 credit unions with assets of $50 million or more shared their thoughts on the plans....

SAN DIMAS, Calif. -During what was billed as the first ever "Credit Union Summit" on Feb. 23, CURIA and capital were the big newsmakers (See page 3 of CU Times March 3 issue), but there were also some other interesting news nuggets concerning business lending, credit unions converting to banks...

CHICAGO - While the future looks "bright" for many community bankers, some are still worried about their biggest competitive threats and they're not credit unions, according to one survey. Grant Thornton's Twelfth Annual Survey of Community Bank Executives, released recently, surprisingly revealed that 76% of bankers viewed other community banks...

ORLANDO, Fla. - What better way for a credit union to get the word out that it offers boat loans than to go to where it's certain to find boat lovers. CFE FCU did just that at the 38th Annual Central Florida Boat Show. The four-day event was held Feb....

WILMINGTON, Del. - MBNA, the monoline card issuer which is a leading purchaser of credit union card portfolios, hopes to have all 80 of its credit union agent issuing clients agree to permit the marketing of its MBNA Rewards American Express Cards to their members by the second quarter of...

Banker-Sponsored Credit Union Study Finds Tax Exemption Unjustified WASHINGTON-A study released recently by the Tax Foundation, an organization that has monitored tax policy at the federal, state and local levels since 1937, called the credit union tax exemption `unjustified' and said it is costing the nation billions. According to the...

WEST PALM BEACH, Fla. - Like members of a family, university credit unions share a lot in common - but they each have their own personalities and challenges. "State universities are struggling with getting funding for higher education," says Bill Sterner, CEO of the University of Colorado Credit Union in...

CHARLOTTE, N.C. - Bank of America Corp. will not be required to disclose to shareholders how the elimination of 17,000 jobs as a result of a FleetBoston Financial merger will impact employees and their dislocation. A proposal submitted by the United Brotherhood of Carpenters Pension asked that BofA share specific...

WASHINGTON - Representatives from the Pennsylvania Credit Union Association were joined by Congressman Paul Kanjorski (D-Pa.) on Feb. 28 for the dedication of the Pennsylvania Room at Credit Union House. "The dedication ceremony for the Pennsylvania Room at Credit Union House was a fitting tribute to the leadership role that...

WASHINGTON, D.C. - The Department of Treasury and IRS just announced proposed regulations regarding designated Roth contributions to 401(k) plans. Roth contributions, which were created in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), will allow for employees to designate all or a portion of their 401(k)...

BOSTON - Many Baby Boomers are not turning to financial advisers when it comes time to roll over their 401(k) assets at retirement, according to one recent study. Eighty-four percent of people ages 55 to 70 who have incomes above the $100,000 mark use financial advisers but only 30% do...

FAIRBORN, Ohio - Wright-Patt Credit Union has raised nearly $90,000 for the American Red Cross Tsunami Relief Fund. Since January, the credit union in partnership with WHIO-TV7, launched a donation drive to help the tsunami survivors. "With the caring and generosity of the communities we serve, we hope that the...

ARLINGTON, Va. - Card transactions of $10 or less have risen by more than six times since 2000, according to Cardwatch.com, an Internet site that tracks card data. Last year, Americans racked up more than $35 billion in small ticket purchases, led by quick service restaurant card purchases. Between 2003...

WEST JORDAN, Utah - More than a year after its launch, MBL LLC, is gearing up to host its MBL 101 Training Conference. The $1.4 billion Mountain America Credit Union, which launched the member business lending CUSO in early 2004, is the nation's number one CU provider of SBA loans....

FARMERS BRANCH, Texas - Two new asset-category directors have been elected to the board of Texas Credit Union League. Nancy Croix Stroud, president of First Class American Credit Union, Fort Worth, has been elected for Asset Category C ($20-50 million) and Wayne Vann, president of Navy Army Federal Credit Union,...

WASHINGTON-Being a proponent of bankruptcy reform is something like being a Red Sox fan, Senate Banking Committee Member John Sununu (R-N.H.) explained. "I honestly believe this is the year," he said, just like Red Sox fans who had gone without a World Series win in several decades. Bankruptcy reform has...

WASHINGTON-House Financial Services Member Deborah Pryce (R-Ohio) told attendees of CUNA's GAC not to worry if they did not get to meet directly with their members of Congress during their visits. "Meet with the staff. Around here, it's the staff who make all the decisions anyway," she said laughing. Pryce...

PINE BROOK, N.J. - CU National Mortgage, a division of US Mortgage, that works exclusively with credit unions and members throughout the U.S. is now selling mortgages on the secondary market to Fannie Mae for credit unions through its new correspondent lending program. CU National Mortgage's Jill Peterson, VP, marketing...

ARLINGTON, Va. - NASCUS is in the process of reviewing specifics in the draft report recently issued by NCUA that included proposed changes to net worth standards related to prompt corrective action. NASCUS said it "sees PCA as an ongoing concern and is pleased that NCUA has issued its long-awaited...

WASHINGTON - Credit unions in New York, New Jersey, Puerto Rico and the Virgin Islands have a new SBA regional administrator. William Manger has been named to the post for Region II, which covers those areas, the SBA announced. He will oversee business development and counseling programs. Manger worked for...

ROCHESTER, N.Y. - ESL Federal Credit Union has announced that the United States Air Force's Air Demonstration Squadron, The Thunderbirds, will be featured at this year's ESL International Airshow, slated for June 11-12. This marks the third year that ESL FCU will host the ESL International Airshow. In addition to...

Nothing like a few visual aids to get your point across. Here CUNA Chairman and Texas CU League CEO Dick Ensweiler uses just that to describe how the bankers want to keep credit unions in the olden days. Ensweiler said bankers want credit unions to operate as they did years...

SPRINGFIELD, Ill. - In motions filed with a state court judge here, Illinois Governor Rod Blagojevich has agreed to temporarily halt fund "sweeps" from credit union and bank supervisory agencies while a lawsuit brought by the Illinois Credit Union League and financial trade groups moves forward. That was the word...

WAKEFIELD, Mass. - Encore Merchant Services and Encore Card Services, both connected to the Encore Electronic Service Cooperative, have reported picking up four new credit union clients. Encore Card Services said it has added the $89 million AFL CIO Employees FCU headquartered in Washington, D.C. The credit union cited Encore's...

ALEXANDRIA, Va.-NCUA wrote a guidance letter to corporate credit unions (No. 2005-01) Feb. 23 on Bank Secrecy Act requirements for `batched' items. Previous guidance said it was reasonable to expect corporates to periodically check its monetary instruments record for characteristics of structuring in non-batched items, which could be easily detected....

CHEYENNE, Wyo. - A bill to give Wyoming credit unions greater access to small claims courts on loan recoveries is awaiting the signature of Gov. David D. Freudenthal who is expected to sign the measure. Enactment of the bill backed by the Wyoming Credit Union League empowers CUs to collect...

News Briefs

BETHESDA, Md. - Two more credit unions, one in Tennessee and one in Texas, have joined the Allpoint Network, the network has announced. Allpoint is the nationwide ATM network which provides ATM access surcharge-free to cardholders of participating institutions. In exchange the credit union pays a flat fee to Allpoint...

WASHINGTON-Pennsylvania Senior Vice President of Communications and Marketing Michael Wishnow gave GAC attendees in the "Scooping the Bankers" breakout session an earful about how to handle media relations. He emphasized the differences and similarities between public relations and advertising. "When you're talking about public relations, it's still messaging but it's...

WASHINGTON - The effort to defend the CDFI Fund from elimination appears to have gained an important ally in the form of CUNA, as the association has formally begun to lobby the Congress against the Administration's proposal for the Fund which has helped fund community development credit unions. The help...

SQUAMISH, Canada - The Royal Canadian Mounted Police are blaming a ring of identity thieves for a series of thefts at a credit union and other financial institutions in which the thieves stole machines used to generate ATM cards, according to a story in the Pemberton Question, a local paper...

LYNCHBURG, Va. - The Virginia Credit Union League and District of Columbia Credit Union League, which have had a management agreement for more than six years, are the newest credit union leagues to talk of merging. VCUL Board Chairman Bill Cook has appointed a committee to examine governance issues as...

HALES CORNER, Wis. -Corporate Central CU has issued the largest CD transaction ever through SimpliCD. Almost all corporates offer SimpliCD through the corporate network-owned Primary Financial, but none have had a larger issuance than Corporate Central with the recently issued $10 million CD to United One CU in Manitowoc, Wis....

In Other News

Insight Financial Credit Union, Orlando, Fla., has donated several large boxes of valentines to the James A. Haley VA Medical Center, which serves veterans in Central Florida. The valentines included much needed items such as shampoo, soap, toothpaste, combs, and tube socks. These goods were sent in addition to sugar-free...

Tech Bytes

NORTHVILLE TOWNSHIP, Mich. - Michigan credit unions will soon be able to use an upgraded version of the Web-based indirect lending system from their league. The new version of the Credit Union Dealer Indirect Lending & Leasing system from the Michigan Credit Union League will include upgrades intended to reduce...

AUSTIN, Texas - The Credit Union Information Security Professionals Association has landed its first CUSO member, and it's a big one. PSCU Financial Services, at more than 500 members the nation's largest credit union service organization, has joined the CUISPA as a charter affiliate member. PSCU's information security officer, Robert...

HOUSTON - Security Service FCU, the largest indirect lending credit union in the U.S. - it averages more than $100 million auto loans a month in Texas and Colorado - has signed an agreement with Auto Financial Group (AFG), an online provider of residual-based financing products for CUs. Under the...

SAN BRUNO, Calif. - Credit unions in the CO-OP Network can now offer their members a voice-automated ATM locator. CO-OP has deployed Apptera's locator application, which was initially launched early last year by Apptera - its first financial client was Bank of America. The system allows members to call in...

FORT WORTH, Texas - The $1.5 billion OmniAmerican CU, which won't be a credit union much longer if its membership approves the attempted conversion to a mutual savings bank, has successfully converted to the OSI platform. OmniAmerican not only converted to OSI's core system, but also installed a number of...

PORTLAND, Ore. - Corillian Corp. says more than 20 credit unions and banks have signed up so far to use its new Corillian Fraud Detection System. The online banking vendor says its system centers on a patent-pending Web log analysis solution and methodology that identifies potential phishing behaviors before an...

KING OF PRUSSIA, Pa. - Credit union data processor GalaxyPlus, a Fiserv subsidiary, said it will now start marketing Strohl Systems' PLANet online business continuity product. It allows credit unions to evaluate their business continuity plan and maintain that plan online in a secure environment that can be accessed from...

WASHINGTON - At the mid-point of tax filing season, the Internal Revenue Service said that taxpayers have used e-file at a record rate. Out of 47 million tax returns filed through Feb. 25, 74% of them were e-filed - up from 69% the previous year. While this percentage traditionally declines...

INDIANAPOLIS - FORUM Credit Union will be using the SilverCloud knowledge management system to provide member information on its Web site at www.forumcu.com, the $836 million credit union says. The information database from New Hampshire-based SilverCloud Software Inc. was originally developed with input from about 20 charter credit unions and...

Letters to the editor

I think it's great that Community Credit Union will remain in the shared branch network even after it converts to a bank. I would welcome banks in our FSCC shared branch network provided that they agree to our rules and pay our fees. Why? Because more outlets will result in...

Looking Back

Looking back five years ago finds the unveiling of Reg-Flex at the CUNA Governmental Affairs Conference. Reiterating the message that less regulation is in credit unions' best interest to compete effectively, NCUA Board Member Dennis Dollar explained that NCUA must get away from a "one size fits all" regulatory approach....

Publisher's Column

Although the location, hotel, and program format is the same every year, even regular participants at the annual CUNA Governmental Affairs Conference in Washington, D.C. come away with different impressions each year they attend. I know I do! This year's record 4,000 plus turn out (over 300 first-timers), was exposed...

GAC

WASHINGTON - Leaders of Harland Financial Services were touting the company's acquisition of bank/thrift outsourced core processor Intrieve, Cincinnati, at CUNA's GAC as a potential boon to its credit union clients. They believe it will not only broaden Harland's reach in that market, but also make some new products available...

WASHINGTON - For her dedication to the development and promotion of community development credit unions, Rita Haynes, CEO of Faith Community United Credit Union, has been named this year's recipient of the Pete Crear Lifetime Achievement Award by the African-American Credit Union Coalition. During her tenure, Cleveland-based Faith Community United...

WASHINGTON-During remarks last week at CUNA's GAC, NCUA Chairman JoAnn Johnson announced that she has asked agency staff to review the use of the matrix in determining credit unions' CAMEL ratings. "Some of you have expressed concern over the use of the matrix in determining individual elements of the CAMEL...

WASHINGTON-CUNA's GAC featured two of the four main sponsors of the Credit Union Regulatory Improvements Act, who have high hopes for the bill this Congress. "The goals have not changed, but we're considering some modifications," Congressman Ed Royce (R-Calif.) said of CURIA, which was introduced under his name. He explained...

WASHINGTON-While many of credit unions' problems could be washed away if bankers would just leave them alone, they should not be credit unions' only concern. NCUA Board Member Debbie Matz suggested that credit unions "look beyond banks and challenge other, perhaps more menacing, opponents - predatory lenders," at CUNA's Governmental...

WASHINGTON-Before Treasury Secretary John Snow launched into a speech on Social Security reform, he was sure to reiterate the administration's backing of credit unions' tax-exempt status. At last week's CUNA Governmental Affairs Conference, the secretary noted that credit unions face a number of issues, including tax policy. "I think you...

WASHINGTON-Four-star General Tommy Franks, the featured speaker at CUNA's Governmental Affairs Conference, pulled no punches in describing his feelings about banks. Out of the starting gate, one of the general's first remarks was, "Hell, who needs banks?" Later, he disclosed that he had never borrowed from a bank. Franks is...

WASHINGTON-Industry advocacy experts advised credit unions to do as much as possible with their limited resources during a break out session at CUNA's Governmental Affairs Conference. California Credit Union League Director of Public Relations Henry Kertman said the league's latest advocacy efforts are an "ongoing, forever-we hope-change in the way...

WASHINGTON- Here Suncoast Schools FCU CEO Tom Dorety (left) presents Small Business Administrator Hector Barreto with a plaque in recognition of his support of credit unions. "You reach people that nobody else can reach," Barreto said. He stated that 50 credit unions have already made $26 million in SBA-backed loans...

WASHINGTON-Federal Reserve Board Governor Mark Olson commended credit unions for taking the lead in pushing Check 21 through Congress and into implementation during CUNA's Governmental Affairs Conference last week. However, adaptation is moving more slowly than initially anticipated, he said. There was not a lot of investment in the necessary...

WASHINGTON - Requirements for which credit unions are responsible under the new Fair And Accurate Credit Transactions or FACT Act and those for which they might be responsible under coming regulations were the topic of a standing room only meeting of credit unions executives and board members attending CUNA's Governmental...

Credit Union Times Editor Paul Gentile (right) presents Wescom Credit Union CEO Darren Williams with the Credit Union Times 2004 CEO of the Year Award. Williams was honored by Credit Union Times during a dinner on Feb. 27. In addition to the award, Williams received a framed copy of the...

WASHINGTON - Two mainstream credit unions took the stage at a breakout session of CUNA's Governmental Affairs Conference to tell credit union executives and board members a bit about how they have done well by working with lower income members and residents of underserved communities. Jim Blake, CEO of the...

Opinion

Discretionary overdraft protection, when done right, provides one of the best member services credit unions can offer as an alternative to the thousands of check cashing outlets on street corners throughout so many underserved neighborhoods. These check cashers have taken the business of millions of our members and built a...

University Federal Credit Union, Austin, Texas, has named James A. Nastars senior vice president of lending and collections. Smart Financial Credit Union, Houston, has named Mike Piwetz CIO/vice president of IT.